Transcript Chapter 1: From bla to bla

Project: NNG Hospital
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Overview
Payback Analysis
NPV
Tasks:
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Provide an overview of the proposed
system, including costs and benefits, with
an explanation of the various cost-benefit
types and categories.
Develop an economic feasibility analysis,
using payback analysis, ROI, and present
value (assume a discount rate of 10%).
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Cost-Benefit Summary
Payback Analysis
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Current System:
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six hours of office staff (2 people) overtime
per week (1.5 times normal rate) at a base
rate of R150 per hour for 6 months
add another full-time clerical position in about
six months for another 6 months.
an average of three errors per day, and each
error takes about 20 minutes to correct
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In-House System
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complete the project in about 12 weeks
R350 per hour.
database application, you can expect to
spend about R42,000 for a networked
commercial package
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Vertical-Package:
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a vertical software package is available for
about R120,000. The vendor offers a leasepurchase package of R40,000 down, followed
by two annual installments of R40,000 each.
four weeks to install, configure, and test it
free support during the first year of operation,
but then NNH must sign a technical support
agreement at an annual cost of R6,000
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Costs for Both Systems:
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10 hours of initial training and support each
week for the first three months of operation
routine maintenance, file backups, and
updating. These tasks will require about four
hours per week and can be performed by a
clinic staff member
hardware and network installation will cost
about R125,000
System life will be about five years
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Tasks:


Provide an overview of the proposed
system, including costs and benefits, with
an explanation of the various cost-benefit
types and categories.
Develop an economic feasibility analysis,
using payback analysis, ROI, and present
value (assume a discount rate of 10%).


Cost-Benefit Summary
Payback Analysis
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Task 3
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Provide a brief explanation of the various
alternatives that should be investigated if
development continues, including in-house
development and any other possible
strategies.
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Answer:
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These include
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Web-based software trends,
outsourcing options (such as application service
providers and Internet business service
providers),
and in-house development (including building,
purchasing, or customizing a software package,
and user applications).
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